Honest regulator

Posted: Thursday, May 20, 2010

The following editorial first appeared in the Anchorage Daily News:

Part of the fallout from the Deepwater Horizon disaster in the Gulf of Mexico is good news for honest, no-conflict regulation of U.S. offshore drilling. Secretary of the Interior Ken Salazar wants to split the regulating and revenue-collecting functions of Minerals Management Service, with a new agency taking over regulatory oversight. Somewhere up there, Wally Hickel is smiling. And maybe shaking his head.

Salazar's proposal means that the regulators won't be watching the revenue stream and getting its priorities confused. His proposal means that the regulators will focus on safety, best practices and best available technology to minimize blowouts and spills.

Most important of all, he said clearly that while the oil industry certainly will be involved in writing the rules, it won't be in the driver's seat. The regulators will be. Simply put, the rules and adherence to them will have to satisfy the nation, not just the industry. That's the way it's supposed to be.

That's not the way it has been. The MMS has been understaffed and hurt by scandal in recent years, with an Interior inspector general calling the agency an ethical wasteland and critics saying it relied on industry assurances that its practices were safe.

The industry has to be there - after all, it knows the most about the business. But it is not sovereign. And there's an inherent, obvious conflict in letting any industry write its own rules for safety and environmental protection when those operations cut into profits.

The late Wally Hickel served as governor of Alaska and secretary of the Interior. He was a champion of oil exploration and production on Alaska's North Slope and of producing Alaska's natural gas. He counted industry executives among his friends. But he never hesitated to assert state sovereignty when he thought the industry was crossing the line.

And as Interior secretary, he didn't hesitate to shut down all U.S. offshore drilling after the Unocal spill off Santa Barbara in 1969.

The message was clear: Do it right. That's the message government has to send to the industry. That's the message the industry needs to embrace.

Look at the message we're getting from the Gulf of Mexico now - an unfolding narrative of human failure, technological failure, regulatory failure and an MMS that was too cozy with industry. BP's recent record has come up for review, and the picture isn't pretty.

That narrative does nothing for faith in future development.

Alaskans are familiar with oil production done right and with what happens when things go wrong. We've said it before and it bears repeating: There always is risk in exploration, production and transport of oil. It's a dangerous business in more ways than one. It's also an essential business.

To reduce the risk, we have to do it right.

The regulator doesn't have to wage constant war with the industry - just the opposite. The regulator and the industry need to know each other. But they also need to understand each other. The regulator doesn't serve the industry. The regulator serves the broad interests of the people of the United States. His or her job isn't to make life easier for the industry, nor to make it unnecessarily harder. The job is make sure that the oil industry explores and produces in the safest, most environmentally sound way possible.